Will My Spouse Be Affected By My Bankruptcy?

When filing for bankruptcy, many wonder "Will My Spouse Be Affected By My Bankruptcy?" An important concern when filing for bankruptcy canbe how the process will affect your spouse. The answer depends on your situation. If your spouse does not also owe the debt and did not co-signfor the debt, then they have no obligation to pay your debt when you file for bankruptcy. However, if they are the joint owner or co-signer, the creditor can still pursue your spouse even after you file.

There are a few ways to deal with the latter situation. You and your spouse could file for bankruptcy together in a joint filing. Alternately, youcould keep sending payments to the creditor, even if that debt is part of the bankruptcy. This solution only works if the joint debt is a small part ofthe overall debt. If it is the main source of debt, it would make more sense to file joint bankruptcy.

A spouse can affect the bankruptcy process in other ways. If he or she has a good source of income, it makes it harder to qualify for Chapter 7 bankruptcy. It also might affect how much you have to pay unsecured creditors in Chapter 13 bankruptcy. However, you may be able to removeparts of your spouse’s income from the filing through marital adjustment deduction. This deducts parts of the income he or she uses for personal expenses. Any portions that are used to support the household remain in the bankruptcy calculations.

If you have any questions concerning how bankruptcy will affect you and your spouse in the State of California, contact us at Grennier Law. Wewould be happy to help.

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